Avesoro Resources has signed an agreement to acquire two gold mines in Burkina Faso for an aggregate value of $69.5m.
The transaction comprises the Youga and Balogo mines through the acquisition of the entire issued share capital of MNG Gold Burkina, Cayman Burkina Mines, MNG Gold Exploration, AAA Exploration Burkina and Jersey Netiana Mining, as well as their subsidiaries from Avesoro Jersey.
Avesoro Jersey is a majority shareholder in Avesoro with around 73% interest.
Under the agreement, the company will issue 2,033,492,822 common shares worth $51m to Avesoro Jersey, and a cash component of $18.5m, which has been raised through te placement of shares.
Through the acquisition, Avesoro intends to simplify its management structure.
Avesoro Resources CEO Serhan Umurhan said: “The assets will provide Avesoro with geographic diversity within West Africa and are highly complementary to our existing New Liberty mine, significantly increasing Avesoro’s gold production, in addition to adding high-quality exploration upside that will provide for further future organic growth.
“In conjunction with the turnaround at New Liberty, this acquisition marks a significant next step in achieving our long-term plan to become a premier mid-tier African gold producer.”
The projects are expected to have significant exploration upside.
In addition, the deal is expected to increase the company’s forecast proforma gold production for this year to 180,000oz-190,000oz, as well as add 500,000oz of proven and probable mineral reserves and 700,000oz of inferred mineral resources.
Subject to stock exchange and minority shareholder approvals, the transaction is scheduled to close next month.